“¢ A follow-through USD profit-taking helps stage a goodish rebound.
“¢ Remerging Brexit concerns keep a lid on any meaningful up-move.
The GBP/USD pair stalled its recovery move just ahead of the key 1.3500 psychological mark and quickly retreated around 40-pips from session tops.
The pair was seen building on its overnight modest rebound from sub-1.3400 level and got an additional boost from a follow-through US Dollar profit-taking slide. Further gains, however, remained capped amid reemerging Brexit concerns, which has been a key overhang for the British Pound in the recent past.
Meanwhile, the pair had a rather muted reaction to mixed comments by the BoE MPC members at the testimony on the inflation and economic outlook before the Parliament’s Treasury Select Committee (TSC) this Tuesday.
The pair now seems to be finding some support near mid-1.3400s as investors now start repositioning for this week’s important UK macro releases, including the latest consumer inflation figures and month retail sale data.
This along with the latest FOMC meeting minutes, coupled with speeches by influential FOMC members and the release of US durable goods might assist investors to determine the pair’s next leg of directional move.
Technical levels to watch
Any subsequent retracement is likely to find support near the 1.3435-30 region, below which the pair is likely to slide back towards retesting the 1.3400 handle before eventually heading further lower in the near-term.
On the upside, momentum back above 1.3475 level might continue to confront some resistance ahead of the 1.3500 handle, which if cleared might trigger a short-covering bounce towards 1.3555-60 supply zone.
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